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76–487 2012

TALES OF RESILIENCE: SMALL BUSINESS SURVIVAL 

IN THE RECESSION 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

HEARING HELD 

JULY 25, 2012 

Small Business Committee Document Number 112–081 

Available via the GPO Website: www.fdsys.gov 


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(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

SAM GRAVES, Missouri, Chairman 

ROSCOE BARTLETT, Maryland 

STEVE CHABOT, Ohio 

STEVE KING, Iowa 

MIKE COFFMAN, Colorado 

MICK MULVANEY, South Carolina 

SCOTT TIPTON, Colorado 

CHUCK FLEISCHMANN, Tennessee 

JEFF LANDRY, Louisiana 

JAIME HERRERA BEUTLER, Washington 

ALLEN WEST, Florida 

RENEE ELLMERS, North Carolina 

JOE WALSH, Illinois 

LOU BARLETTA, Pennsylvania 

RICHARD HANNA, New York 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

KURT SCHRADER, Oregon 

MARK CRITZ, Pennsylvania 

JASON ALTMIRE, Pennsylvania 

YVETTE CLARKE, New York 

JUDY CHU, California 

DAVID CICILLINE, Rhode Island 

CEDRIC RICHMOND, Louisiana 

GARY PETERS, Michigan 

BILL OWENS, New York 

BILL KEATING, Massachusetts 

LORI SALLEY, Staff Director 

PAUL SASS, Deputy Staff Director 

BARRY PINELES, General Counsel 

MICHAEL DAY, Minority Staff Director 


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C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Sam Graves ..................................................................................................... 1 

Hon. Nydia Vela ́zquez ............................................................................................. 2 

WITNESSES 

H. Todd Flemming, President/CEO, Infrasafe, Orlando, FL ................................ 3 

Michael R. Minogue, Chairman, President & CEO, Abiomed, Danvers, MA ..... 5 

Elise Mitchell, APR, Fellow PRSA, President and CEO, Mitchell Communications Group, Inc., Fayetteville, AR ..................................................................... 6 

Michael DiMarino, President, Linda Tool, Brooklyn, NY .................................... 9 

APPENDIX 

Prepared Statements: 

H. Todd Flemming, President/CEO, Infrasafe, Orlando, FL ........................ 21 

Michael R. Minogue, Chairman, President & CEO, Abiomed, Danvers, 

MA .................................................................................................................. 26 

Elise Mitchell, APR, Fellow PRSA, President and CEO, Mitchell Communications Group, Inc., Fayetteville, AR ....................................................... 32 

Michael DiMarino, President, Linda Tool, Brooklyn, NY ............................. 36 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Materials for the Record: 

Belzona: Rumford Industrial Group Letter for the Record ........................... 39 

AdvaMed Letter for the Record ....................................................................... 42 


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TALES OF RESILIENCE: SMALL BUSINESS 

SURVIVAL IN THE RECESSION 

WEDNESDAY, JULY 25, 2012 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to call, at 3:07 p.m., in Room 

2360, Rayburn House Office Building, Hon. Sam Graves [Chairman 

of the Committee] presiding. 

Present: Representatives Graves, Mulvaney, West, Hanna, Schilling, Vela ́zquez, Chu, and Keating. 

Chairman GRAVES. Good afternoon. I want to call this hearing to 

order. And I apologize for the postponement. We had a series of 

votes that obviously took a long time, and we are sorry for that. 

But I want to thank all of our witnesses for being here today. 

You know, General George Patton once said, ‘‘Success is how 

high you bounce after you hit bottom.’’ I think this statement is 

particularly relevant in today’s hearing on how small-business owners have found success during what has been a very long and stubborn recession. 

The past few years have been very rocky, to put it mildly, and 

the economy has remained fragile and challenging for today’s 

small-business owners. Over the course of this Congress, our Committee has heard from numerous small businesses who have described the challenges of access to capital, taxes, regulations, and 

general uncertainty about what is coming next. And while we keep 

hoping for signs of a lasting recovery, there continue to be very real 

difficulties. Small-business optimism plummeted last month, and 

unemployment remains over 8 percent. 

Despite these troubling times and real economic setbacks, motivated entrepreneurs and resilient small businesses have managed 

to navigate the murky economic waters to find success and propel 

economic growth. Today we are looking forward to hearing some of 

the good news. Our witnesses will enlighten us with their perspectives on how they have prospered in spite of a stagnant economy. 

The American dream rightfully evokes images of America’s smallbusiness owners, and it will be their entrepreneurial spirit that 

will eventually allow us to bounce back. 

These are tough economic times, but today I want to commend 

our witnesses and all of America’s small-business owners who realize that there is still a potential for success. These entrepreneurs 

have fought back against the pitfalls by adapting their business 

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novative techniques to combat the recession, while continuing to 

bolster economic growth. 

And, again, I want to thank you for being here and taking the 

time. 

And I will turn to the Ranking Member Vela ́zquez for her opening statement. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. 

Since the financial crisis of 2008, this Committee has been regularly examining the strength of the small-business sector. In the 

past, we have shed light on credit conditions, consumer spending, 

and changes in employment. 

Throughout our hearings, it has become clear that small firms 

have reacted differently to the downturn and recovery that followed. For some, these difficulties have meant scaling back their 

operations and cost-cutting, but for others this period offered a 

chance to expand. Given their nimble nature, entrepreneurs and 

small companies have been more readily able to capitalize on these 

opportunities, creating prosperity in the face of adversity. 

We should not be surprised that some small businesses thrive in 

a tough economy. Throughout history, we have repeatedly heard 

the story of resolute entrepreneurs overcoming difficult circumstances to strengthen and rebuild our Nation. One might say, 

when the going gets tough, small businesses get going. 

This most recent recession and recovery have been no different. 

According to a Kauffman Foundation index, entrepreneurial activity has been higher for the 3 years since the recession ended in 

2009 than for the 4 years prior. In 2011, this meant that, on average, nearly 550,000 new businesses were created each month. 

Nonetheless, it is clear that many difficulties lie ahead. The sovereign debt situation in Europe continues to be a drag on the U.S. 

economy, particularly for firms that export. In addition, the fiscal 

cliff is creating uncertainty, thereby hampering investment and expansion. Together, these issues are weighing on small businesses 

and undermining consumer confidence, which hurts sales and revenue growth. This has resulted in a tentative overall economic picture. 

Yet, as they have before, small businesses remain a guiding 

light. The most recent ADP Employment Report showed that small 

firms created 93,000 jobs, accounting for more than 50 percent of 

all employment gains. 

In that regard, today’s hearing is critically important. In every 

corner of our country, small businesses are driving our economy 

forward. Whether it is Kansas City, Missouri, or Brooklyn, New 

York, the picture is the same: Small firms are creating jobs and restoring hope in communities hard hit by the downturn. 

Today we will hear more of these inspiring success stories and 

what we can do to replicate them elsewhere. In that regard, I want 

to thank our small-business witnesses for testifying today and 

sharing their valuable insight with us. 

Thank you, and I yield back. 

Chairman GRAVES. Thank you. 

Our first witness is Todd Flemming, who is president and CEO 

of Infrasafe in Orlando, Florida. It is a global security technology 

integrator focused on serving both public- and private-sector orgaVerDate Mar 15 2010 02:33 Dec 01, 2012 Jkt 076487 PO 00000 Frm 00006 Fmt 6633 Sfmt 6602 E:\HR\OC\A487.XXX A487

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nization with the highest-caliber security standards. He is testifying on behalf of the Small Business and Entrepreneurial Council. 

Mr. Flemming has over 20 years of broad-based management experience in the security industry, including business startups, design, 

marketing strategy, research development, and manufacturing. 

Thank you for being here today, Mr. Flemming. 

STATEMENTS OF H. TODD FLEMMING, PRESIDENT AND CEO, 

INFRASAFE, INC., ORLANDO, FLORIDA, ON BEHALF OF THE 

SMALL BUSINESS AND ENTREPRENEURSHIP COUNCIL; MICHAEL R. MINOGUE, CEO, PRESIDENT, AND CHAIRMAN OF 

THE BOARD, ABIOMED, DANVERS, MASSACHUSETTS, ON BEHALF OF THE ADVANCED MEDICAL TECHNOLOGY ASSOCIATION; ELISE MITCHELL, PRESIDENT AND CEO, MITCHELL 

COMMUNICATIONS GROUP, INC., FAYETTEVILLE, ARKANSAS, 

ON BEHALF OF WOMEN IMPACTING PUBLIC POLICY; AND 

MICHAEL DIMARINO, PRESIDENT, LINDA TOOL, BROOKLYN, 

NEW YORK 

STATEMENT OF H. TODD FLEMMING 

Mr. FLEMMING. Thank you. Good afternoon, Chairman Graves, 

Ranking Member Vela ́zquez, and members of the Committee. 

Thank you for hosting this important hearing today and for your 

invitation to provide testimony. 

My name is Todd Flemming, president and CEO of Infrasafe, 

headquartered in Orlando, Florida. Infrasafe is a global security 

technology integrator focused on serving organizations with the 

most stringent security requirements. Our mission is to provide our 

clients with unique, flexible, long-term solutions to manage both 

physical and information security. 

Veristream and Advantor Systems Corporation are subsidiaries 

of Infrasafe. Advantor provides a wide spectrum of security technology and services to the government, and Veristream is a software-as-a-service provider committed to protecting organizations 

from risks, focusing on visitor and vendor management, information security, and secure credential management and application. 

Infrasafe was founded in 2002 during one of the last recessions. 

In the middle of every difficulty lies an opportunity, Albert Einstein said. Fortunately, Infrasafe has experienced solid growth over 

the past 5 years. In 2007, at the beginning of the recession, we employed 57 people. As of this month, Infrasafe has a workforce totaling 177, and we expect to employ over 200 people by the end of 

August. 

The great recession followed a weak economic recovery and ongoing uncertainties that have made every business environment a 

very challenging one to navigate. I happen to be in an industry 

where demand continues to grow. However, it is very competitive 

for small players like Infrasafe. We operate in both government 

and private and commercial sectors, which also offers a unique set 

of challenges. Infrasafe has grown by staying focused, integrating 

technology to help us be more efficient, and carefully paying attention to the fundamentals that drive our bottom line. 

Most importantly with a small business, we have to stay focused. 

Small businesses like Infrasafe have limited resources, and we 


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need to deliver value to the customer. Our company has found a 

niche and successfully delivered on our promises. We have accomplished this by delivering on our promise of powerful and effective 

technology backed by uncompromising service and support. 

We have also found that we need to remain flexible. Being small, 

we need to be able to look for opportunities that present themselves in front of us and make sure that our employees are able 

to enjoy a flexible work schedule and places that they work within 

our company. 

We have a global presence. Our client base spans four continents, 

reflecting our unique ability to meet diverse and challenging needs 

of business, government, and international and global markets. 

Probably most importantly, we stayed financially focused. 

Infrasafe, since its founding, focused on CPR: cash, profit, and revenue growth, in that order. We maintain a conservative balance 

sheet, given the economic uncertainties. As mentioned above, we 

strive to be more efficient. We domestically outsource, where we 

have a manufacturer in Cocoa Beach, Florida, who manufactures 

our printed circuit boards and a small metal house on the west 

coast of Florida that makes our chassis. We have embraced technology. We have used software as a service to help us reduce our 

costs of managing technology. And then we have also put together 

GPS systems to route our trucks more efficiently and allow us to 

responded to our customers more quickly. 

Importantly, human capital. Infrasafe employees are the foundation of our success. We continually to strive to build an environment that fosters creativity and support. Infrasafe works to instill 

a culture of excellence and manifest itself in the emphasis we 

placed on training and open communication. As noted above, we 

provide employees with cutting-edge technology tools to efficiently 

do their jobs. 

A lot of hard work and sleepless nights have gone into making 

Infrasafe a success. Obviously, Infrasafe is faced with day-to-day 

challenges like any other company. The economic environment certainly keeps us focused and more conservative when it comes to 

risks and potential new investments. 

The potential headwinds we see this year are key issues that the 

Committee has explored: for example, the uncertain tax environment for S corps and LLCs, the direction of the economy and ongoing uncertainty when it comes to cost and how this impacts our 

commercial expansion, as well as the uncertain Department of Defense environment under the looming shadow of sequestration. 

I thank you for the opportunity to provide this testimony today 

and look forward to your questions. 

Chairman GRAVES. Thank you, Mr. Flemming. 

Our next witness is Michael Minogue, chairman, president, and 

CEO of Abiomed in Danvers, Massachusetts. Abiomed is a pioneer 

in healthcare technology and innovation and is the only company 

with the Food and Drug Administration’s approval for bridge to 

heart recovery. He is testifying on behalf of the Advanced Medical 

Technology Association. And since joining Abiomed in April 2004, 

Mr. Minogue has altered the corporate strategy and mission to create breakthrough heart-support technologies. Mr. Minogue is also 


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a West Point graduate and proudly served in the United States 

Army. 

We thank you for your service. Welcome to the Small Business 

Committee, and we look forward to hearing your testimony. 

STATEMENT OF MICHAEL R. MINOGUE 

Mr. MINOGUE. Thank you. 

Chairman Graves, Ranking Member Vela ́zquez, and members of 

the Committee, my name is Mike Minogue, and I am the chairman, 

president, and CEO of Abiomed. 

Abiomed is a small medical device company located in Danvers, 

Massachusetts. We make Impella, the world’s smallest heart pump, 

which can be inserted through a small hole in the leg within minutes and does not require surgery. The Impella pump is actually 

above my fingers, and the motor is the gray bar, which sits inside 

the left ventricle. 

Our company mission is to recover hearts and save lives. I am 

very proud of this mission and consider our company very unique. 

As a company we have continued to focus on that mission even 

though our journey started more than 30 years ago when we set 

out to develop the artificial heart. 

Today, I come to represent AdvaMed, which is the industry association of all medical devices. The medical technology field is a success story for America, and I am proud to be in this industry, just 

as I was proud to serve in the military. Today, we serve patients, 

and that is the focus and part of the culture. 

As an industry, we directly employ over 400,000 people which, 

indirectly generates up to around 2 million Americans in the 

United States in the medical device space. And what the Committee may not know is that the majority of our industry is made 

up of small companies. More than 70 percent of the industry is 

made up of companies that have less than $100 million in revenues 

and are not yet profitable. 

These companies, much like Abiomed, started with a scientist or 

a physician that wanted to have an idea that would help patients. 

And many of these technologies are where the breakthroughs come, 

and they are usually funded by venture capital that allows this innovation and process to continue. 

As the chairman, president and CEO for the last 9 years, I am 

acutely familiar with the challenges involved with running a small 

business. Abiomed was founded in 1981, and today we are the leader for percutaneous heart-support technologies. We have a broad 

continuum of products, that are outside the United States and 

going through the FDA path. And we have new products that are 

in development, as well. 

When we were founded, we had 10 people and we had no revenue. Today, we have 440 employees, and our revenues last year 

were $126 million. The company, in its 30-year process and journey, has just become profitable this last fiscal year. 

So, for us, the success is founded on three pillars. The first is innovation that addresses a patient need. The second is scientific evidence. And the third is a very familiar theme, hard work with execution. 


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In order to succeed in the medical device space, you need to have 

success with innovation. And Abiomed did create this small heart 

pump, which is, as I have shown you, 1/100th the size of the heart 

but can do half to all of the cardiac output. These products are also 

smaller, so they are easier to put in. They are less expensive than 

traditional VADs, and they provide another offering to patients 

that many have no alternatives. 

We are constantly trying to improve the outcomes, and as the 

CEO, I savor the fact that our company has helped thousands of 

patients over the years go home with their own hearts. 

Secondly, in today’s healthcare economics, we need to make sure 

we have an economic and clinical benefit for the patients. And our 

company has amassed a compelling collection of clinical and economic data showing the benefits, and, recently, we have incorporated it into the medical guidelines. 

The third pillar is hard work. The quality is there, but it is really 

about patient support 24 by 7. This is the founding principle of our 

culture. 

So these three pillars, along with being frugal, have allowed us 

to execute on our mission. This field is driven by innovation, but 

we need a strong and efficient FDA, and Abiomed supports the 

partnership with them so we can bring innovation to the market. 

While we haven’t always been happy with the speed of progress, 

we know that the FDA leadership, specifically Dr. Jeff Shuren, is 

focused on helping small companies and bringing innovation to the 

country. 

My biggest concern has to do with the medical device tax which 

will be implemented this January. This tax will affect jobs. It will 

mix healthcare reform with tax policy. And it will be extra detrimental to companies that are not yet profitable and need every dollar to survive. In closing, this tax, as it represents to Abiomed, is 

more than the health care we spend for all employees, about 15 

percent of our research and development dollars, and about 10 percent of our employee headcount. 

I am honored to be here today. I appreciate that you are looking 

at this. And I am very happy that the U.S. House of Representatives voted in early June to repeal the tax with bipartisan support. 

Most importantly, this tax will delay or eliminate innovations that 

will affect the quality of life for Americans. 

So thank you for allowing us to testify today, and we appreciate 

your interest. 

Chairman GRAVES. Thank you very much. 

Our next witness is Elise Mitchell, president and CEO of Mitchell Communications Group in Fayetteville, Arkansas. The company 

was established in 1995 as a sole proprietorship, and under Ms. 

Mitchell’s leadership, her firm has known exponentially, more than 

400 percent in the last 4 years, to become a top 50 national public 

relations firm. Ms. Mitchell has over 20 years’ experience in public 

relations, and her firm works with an array of industry leaders. 

She is testifying today on behalf of Women Impacting Public Policy. 

Thank you for being here. Look forward to your testimony. 

STATEMENT OF ELISE MITCHELL 

Ms. MITCHELL. Thank you, Chairman. 


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My name is Elise Mitchell, and I am the president and CEO of 

Mitchell Communications Group. I bring you good wishes from my 

company as well as from my community of northwest Arkansas, a 

thriving region with deep entrepreneurial roots. 

I am also here today on behalf of Women Impacting Public Policy, a national nonpartisan organization advocating on behalf of 

nearly 1 million women-owned businesses and representing 64 different business organizations. I am proud to represent all of these 

leaders. 

Established in 1995 as a sole proprietorship, our company has, 

indeed, become a top 50 public relations and strategic communications firm, working with some of the world’s largest companies and 

best-known brands, including Wal-Mart, Hilton Hotels and Resorts, 

Tyson Foods, Procter & Gamble, Sam’s Club, Southwestern Energy 

Company, and J.B. Hunt Transport. We are fortunate to do national and global work with these distinctive clients. We have successfully attracted top talent and developed new and innovative 

communication services. As a result, we have grown 445 percent in 

the last 4 years alone. We are very honored to have won numerous 

industry awards and twice been named to the Inc. 500/5000 list, as 

well as one of the 50 fastest-growing woman-owned and -led companies in North America, as named by Women Presidents’ Organization and American Express OPEN. 

I know other stories like ours but, unfortunately, not enough. In 

reality, many small-business owners have faced significant challenge in this recession. I am often asked how have we achieved this 

kind of growth in spite of a still-uncertain economy. It is as simple 

as this: We have learned to look through the turn. And what do 

I mean by ‘‘looking through the turn’’? Well, I am an avid motorcycle rider, and I have built my business based on this concept, 

which is a fundamental principle of motorcycling that offers great 

insight. As you approach a turn, you must look where you want to 

go, rather than fixating on all of the potential hazards in the turn 

itself. The challenge comes in keeping your eyes focused on where 

you want to end up, while using your instincts and experience to 

adjust within the turn, all at a moment’s notice. 

Inspired by this philosophy, I have used these core principles to 

help our company succeed. And there are several important lessons 

that we have learned along the way. 

First, stay nimble. When change happens, like it did in the fall 

of 2008, you have to be ready to adapt and respond. Small businesses are good at that, and it is definitely a competitive advantage. At Mitchell Communications, we have developed a flexible 

business model that has helped us scale up or down depending on 

our changing client needs and manage large-volume assignments 

even with short notice. 

Second, know how to take risk. I suppose risk is something that 

I am more comfortable with than most because I ride a motorcycle, 

but the trick is to balance risk and discipline to yield solid results. 

This starts by having a clear understanding of your value proposition and then knowing how to build upon that where it makes 

sense. For example, we invest heavily in talent and technology. 

And we have rolled out a number of new services to help us meet 


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emerging client needs, and we are evaluating new opportunities all 

the time. 

Third, stand for something. During some of the darkest days of 

the recession, we came together as a company to write a common 

set of values: trust, open communication, service, results, and commitment. These values guided us when we needed them most, and 

they have helped us attract some of the best employees and clients 

that anyone could hope for. 

And, finally, don’t try to go it alone. The best leaders understand 

the power of a team. It is the greatest privilege of my career to be 

the steward of Mitchell Communications Group. And I have 

learned that excellence attracts excellence, which means great people attract great clients. You can’t have one without the other. It 

is my responsibility to continue creating a compelling culture so 

that amazing things happen when these two groups come together. 

It takes courage to be an entrepreneur, no doubt about that. And 

there is much that Washington can do to make the road smoother 

rather than more hazardous for us. Here are a few things you can 

do to help. 

First, fully consider small businesses in rulemaking. The decisions you make can have a huge impact on our ability to continue 

creating jobs and driving innovation. 

Second, facilitate greater access to capital, especially for the 8.3 

million women-owned businesses in the U.S., and support the resources we need to not just survive but thrive. The SBA Women’s 

Business Centers and the women-owned small-business contracting 

program are a step in the right direction and will yield immense 

results. 

Third, reduce taxes. Many small businesses are S corps, which 

means the company’s taxes are filed under the owner’s personal tax 

return at the same time that we are trying to put profits back into 

the business to make payroll, purchase new equipment, or simply 

keep the lights on. Now is not the time to increase taxes on those 

of us who are making critical investments and creating new jobs. 

As I share our story with you today, I am reminded of the countless women-owned businesses and entrepreneurs of all kinds who 

are working tirelessly to fuel our economy. And when I think about 

them, their dreams and their determination inspire me, as I know 

they do you. Now, more than ever before, our country needs businesses and lawmakers who are willing to look through the turn, to 

fix their eyes on where we want this great country to end up, and 

to work together to get there. 

Thank you. 

Chairman GRAVES. Thank you. 

Ms. VELA ́ ZQUEZ. It is my pleasure to introduce Michael 

DiMarino, president of Linda Tool, a second-generation family business that manufacturers precision machine components and assemblies. He has worked at Linda Tool for 35 years and has grown the 

company from 3 to 28 employees. Linda Tool’s state-of-the-art manufacturing facility is located in the historic Red Hook neighborhood 

of Brooklyn, my district. 

Mr. DiMarino has participated in the launch of the Goldman 

Sachs 10,000 Small Businesses program as well as the cUBS 

mentorship program. Socially committed to the restoration of the 


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community, Linda Tool is also participating in a number of green 

initiatives designed to promote a healthy, sustainable, and safe 

working environment for its employees. 

Welcome, sir. 

STATEMENT OF MICHAEL DIMARINO 

Mr. DIMARINO. Thank you. 

Chairman GRAVES and Ranking Member Vela ́zquez and members of the Committee, thank you for inviting me here to share 

with you some of the things that I and my team of talented, dedicated employees at Linda Tool did to get through this challenging 

financial climate with greater capabilities and secured business 

through 2017. 

The last 4 years have meant sacrifice for all of us. Personally, I 

have been set back financially a great deal, but I was willing to 

alter my lifestyle in order to keep my people. I learned a long time 

ago that state-of-the-art manufacturing equipment is very expensive but the people who operate it are priceless. I handpick any 

team. No skaters. We all feel the same. Everyone pulls together, 

with a singular objective: to do the best job possible. I work hard; 

they work hard. And I pull for the people who pull for me. 

I always try to keep the lines of communications open and let the 

employees know the truth about what is going on. Although times 

were lean and I couldn’t give raises, I did everything I could to 

keep my team together, without laying off a single person through 

the recession or since 1983. It meant sacrifices like cutting back to 

32 hours for a good period of time. But no benefits were lost—no 

vacation pay, no health care. 

Still, the burden of the challenge couldn’t be placed on their 

backs alone, so I looked for other ways I could support them by 

building the business in ways that would provide long-term relief 

and security. How did we do that? We did the opposite of what you 

would expect. Instead of pulling back, we invested heavily in new 

equipment, technology, training, and marketing. I uncovered markets that offered business growth potential, but first I needed to 

get certain things so I could compete for those kinds of contracts. 

I took a big risk and tapped into my personal resources to fund the 

expansion of our manufacturing capabilities and our entrance into 

these new markets. 

From the outside looking in, you would not have known that 

there was a recession at Linda Tool. But there was, and we had 

to work fast and be smart about every next move we took. The key 

to our survival was close management of every detail, no matter 

how small, including the equipment we purchased, making sure to 

pay our vendors on time so they could stay in business, and the 

cross-training of our personnel, strengthening our customer relations to our greatest ability, networking and constant communications, and evaluations along the way. 

I reached out to local resources to help, too. I aligned myself with 

the Southwest Brooklyn Industrial Development Corporation, 

where I met Congresswoman Nydia Vela ́zquez, one of Brooklyn’s 

greatest advocates for small business. She helped us to acquire the 

cost-share grant that was instrumental in the installation of the 

Linda Tool green roof for environmental sustainability, keeping our 


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costs manageable for a project like this. The SBIDC is a great organization, and it may be that everything I did leads back to them 

in some way. 

I also became deeply involved with New York City Small Business Services and their training grant program. I partnered with 

them to run the machinist training program at our facility in Red 

Hook, Brooklyn. Some of you may know how difficult it is to find 

skilled labor. By hosting the training program, I was able to observe the students and present them with an opportunity to apply 

for employment with us. We benefited by being able to select from 

a pool of trained, qualified applicants. Right now, we are talking 

with the SBS about an apprenticeship program. 

We also utilized the SBS’s training grant program to achieve two 

industry certifications. We needed to open up opportunities in market areas we hadn’t been qualified for in the past. For example, 

now we can compete for certain government contracts because of 

these certifications. 

But training not only opened up new business opportunities for 

us, it gave us a way of cutting costs by cross-training our people. 

So the guy who runs the lathe, for example, is also trained to run 

the mill. This way, we were able to reduce labor costs by utilizing 

the talents of our existing people. 

While we were busy with training and certifications, we had to 

start networking in order to make the right contacts. This led us 

to the Goldman Sachs 10,000 Small Businesses program—a tremendous program that can really help enhance a small business 

and the way they think and operate. We also joined the NTMA, 

National Tooling and Machining Association, so we could be connected with new business opportunities, and completed the UBSClinton Foundation mentorship program. 

These resources are valuable tools for a small business and something they should all look at. Now our people are working a lot of 

overtime again, making up for time they lost and then some. So, 

you see, it all balances itself in the end. We faced our challenges 

head-on, guided by inspiration and fueled by teamwork, giving 

what we could and giving up what we had to. Because of that, we 

continue now on a path that has enabled us to access long-term 

contracts that take us right through 2017 and beyond. 

Linda Tool is blessed with great personnel. Just as we offer the 

highest quality in care to our customers, we also offer the same to 

our dedicated employees. I believe we are able to achieve the things 

we set out to achieve because of the people who work for us and 

with us. It is through our support of them that they are able to 

produce what is needed. 

Thank you again. 

Chairman GRAVES. Thank you all for your testimony. 

We will turn to Mr. West to start with questions. 

Mr. WEST. Thank you, Mr. Chairman and Ranking Member. 

And thanks for each and every one of you being here. 

And, Mr. Minogue, thank you also for your service. We share the 

passion of jumping out of airplanes. 

And, Ms. Mitchell, we share the passion of riding motorcycles. I 

have been riding since 1985 myself. 


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So when you talk about, you know, looking into the turn whenever you go into that turn, my first question is this. You know, 

thinking strategically, what is your forecast, where do you see us 

going in the next 4 to 5 years if all things currently remain the 

same? And what type of adverse effects will that have upon your 

business, first and foremost? 

Ms. MITCHELL. Well, we are very excited about the opportunities 

that we believe are before us, but, though, as you say, it depends 

upon what happens in the next 4 to 5 years. 

One of the things that we were very good at that we learned in 

the recession was how to spot emerging opportunity. And it is important for legislators to understand that small-business owners 

need to have certainty in the business environment. This allows us 

to plan better. It is hard for us to be able to look ahead and make 

business decisions. We want to take risk, and I think we are all 

pretty good at that, but we need as much certainty as we possibly 

can have. 

For instance, in the tax situation, we need to have some understanding of what is expected of us. And we want to be able to invest those dollars in creating jobs and innovation. 

Mr. MINOGUE. So, thank you for your question and your time 

today, as well. 

I think the biggest concern that we have is, there needs to be innovation in the space, and the two main drivers for innovation 

right now is to allow companies to not pay taxes on revenue when 

they are not yet profitable so they can continue to innovate, and, 

also, the American public to decide the balance between access to 

new technology versus elimination of all risk. And if the FDA and 

the industry knows what the terms are, we can go ahead and execute and have a win-win for all the American patients. 

Mr. FLEMMING. To reiterate Ms. Mitchell’s point, I think certainty is important. Entrepreneurs are very good at adapting once 

they know the rules, but if you don’t know the rules, it makes it 

pretty hard to figure out which direction you should head. 

You know, from our perspective, you know, every dollar that we 

pay in taxes is a dollar we don’t invest in the business, because we 

are an LLC. So, typically, any dividends we make are to pay our 

taxes, and the rest stay in our business. Because, you know, frankly, that is my very best investment, is reinvestment in my business, not taking the money and putting it in, say, the stock market, 

where I have no control. 

Mr. WEST. Dividends taxes going to 42 percent would not be a 

good thing for you? 

Mr. FLEMMING. No. No. I think, you know, anyplace that we can 

at least have some certainty as to what, you know, the Tax Code 

looks like, that will help. 

And then a large component of our business, we do business with 

the Department of Defense. And I know a lot of small businesses 

have been already impacted—— 

Mr. WEST. Are you nervous about sequestration? 

Mr. FLEMMING. Well, we have been, sort of, planning by diversifying our business for the past couple years, but I am nervous 

about that. So, a couple years ago, I fortified our balance sheet, reVerDate Mar 15 2010 02:33 Dec 01, 2012 Jkt 076487 PO 00000 Frm 00015 Fmt 6633 Sfmt 6602 E:\HR\OC\A487.XXX A487

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tired all our debt, diversified our business in anticipation that our 

defense business could get soft. 

And we provide security products and services. It is something 

the Department of Defense under any circumstances needs. However, when they cut costs, you know, ultimately they come back to 

what is important, but sometimes they cut more with a sledgehammer than a scalpel, if you will. It is very hard for them. 

That being said, it is a very large Department of Defense budget. 

There will be a place for us there somewhere. We just have to, you 

know, stick to our knitting, stay focused, and provide the government the best products and services that we can. 

Mr. WEST. Next question. Today was the first time in the history 

of the Congress that we had a joint hearing between the Department of Defense and the Veterans Administration. 

So, once again, Ranger Minogue, if I can, talk to us about—you 

know, because that is one of the interesting topics, is how we transition these veterans coming out of Iraq and Afghanistan into the 

private sector. You know the unemployment situation we have 

right now with veterans. 

Can you give us, you know, your success story, enabling you to 

come out of, you know, boots and fatigues into suit and tie, be a 

successful president and CEO of a small business? 

Mr. MINOGUE. Congressman West, thank you for asking that 

question. The benefit I had was having a network to end up into 

the healthcare industry. And there are thousands of medical device 

executives, from the CEO of J&J to Abiomed, that have served 

their country. 

Recently we launched a program to identify all of the medical device companies that have veterans that are serving in the company. 

The program is called the medtech veterans program, or MVP. The 

program will inch off this fall within MVP bootcamp return heroes. 

This program will incorporate internships at these participating 

medtech companies, and then will also offer potential full-time employment for the veterans who decide they want to join the industry. 

The genesis of this idea evolved through conversation with some 

of the wounded warriors. When they would interview for internships, they would be told they just didn’t have the qualifications required as compared to other candidates with work experience or 

college degrees. And some of these veterans had spent 2-plus years 

defending the Nation and then back in the hospitals for 12 months, 

trying to heal their bodies. 

So it is a great cause. I appreciate you asking the question. And 

we are very motivated to make the medical device field the home 

of all veterans. 

Mr. WEST. Thank you, Mr. Chairman. I yield back. 

Chairman GRAVES. Ms. Vela ́zquez. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. 

Mr. DiMarino, under the Economic Recovery Act that we passed, 

we included tax cuts for small businesses, such as bonus depreciation and expensing. Did you benefit from that? 

Mr. DIMARINO. Yes, I have taken advantage of that the last 2 

years. We have invested heavily since 2009. We have purchased 

close to a million dollars’ worth of new equipment. 


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Ms. VELA ́ ZQUEZ. So, many reform proposals have included a corporate tax rate reduction that comes at the expense of tax expenditures designed to assist small firms. So my question to you is, how 

would a business like yours be impacted if they lost deductions and 

credits, like bonus depreciation or expensing? 

Mr. DIMARINO. Oh, it would most definitely impact me. It could 

probably kill a purchase that is on the horizon. We are planning 

to purchase more equipment either this year or early next year, 

and if we didn’t have that bonus depreciation, it could negate that 

purchase. 

Ms. VELA ́ ZQUEZ. So do you believe that it is fair to eliminate 

them in order to pay for the corporate tax rate reduction that 

would not benefit small firms? 

Mr. DIMARINO. I need to buy my equipment. 

Ms. VELA ́ ZQUEZ. Uh-huh. 

Mr. DIMARINO. I will have to be a little selfish here. If the burden could be shared a little bit to balance it, if you could, between 

corporations and small business, I don’t know if that is possible. 

But I think it would put a hurt on the small business more than 

a larger corporation. 

Ms. VELA ́ ZQUEZ. Yeah. This Committee is, you know—we are 

here to advocate for small businesses in America. 

Mr. Minogue, we know that cash flow is a challenge for businesses of all sizes, especially small firms. In what ways has the 

Tax Code made it more challenging to compete in a global market 

and a struggling economy? 

Mr. MINOGUE. So, Congresswoman Vela ́zquez, the cash flow from 

the basic level is, we need it in order to invest in the new products 

to get through our clinical studies. 

Ms. VELA ́ ZQUEZ. Uh-huh. 

Mr. MINOGUE. In our case, we have developed a net operating 

loss credit of around $180 million over the last 30 years. The biggest challenge to our cash flow moving forward as we generate cash 

is that we will be paying some of that cash back that we could be 

reinvesting into new jobs, new products, or new studies. And none 

of this was allocated or there 3 years ago when we set a strategic 

plan in order to become profitable. 

So it goes back to the same theme of consistency and reinvesting 

our dollars where we think is the best opportunity for the company. 

Ms. VELA ́ ZQUEZ. So, besides lowering tax rates, what specific 

changes to tax rules could better help small businesses have better 

access to cash? 

Mr. FLEMMING. If I may? 

Ms. VELA ́ ZQUEZ. Yes. 

Mr. FLEMMING. Simplification. It is very expensive for us to prepare our tax returns. Between the local, State, and Federal preparation of tax returns, it takes an inordinate amount of time and 

money. And we really have to have quite a few people do it. Even 

the smallest businesses, it is well past their level of expertise, unless they are an accounting firm, to be able to do their own tax returns. 

And the complexity of the Tax Code is daunting. In some cases, 

you can’t even—you may not be figuring out what deductions are 


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there that are for you. And it is just a constant struggle to make 

sure that you have your tax returns prepared correctly. 

Ms. VELA ́ ZQUEZ. In terms of sequestration, I know that you have 

Federal contracts, right? 

Mr. FLEMMING. Yes. 

Ms. VELA ́ ZQUEZ. What is your concern right now, and how is the 

uncertainty impacting your company? 

Mr. FLEMMING. It is more, the uncertainty is probably the biggest thing. What we see is, in the Department of Defense, since 

they are not sure of what levels of funding they will be receiving 

and what cuts they will be required to make, particularly when 

they have moved some of their projects to the right and haven’t 

contracted those on a more predictable basis. 

We continually make investment, that we have funded the development of our own products, but we don’t know for certain that 

there is going to be a market for some of those products, depending 

on what happens with respect to, you know, the defense programs 

that are funded and those that aren’t funded. 

Ms. VELA ́ ZQUEZ. For existing contracts that carry into next year, 

have your procurement officers talked to you about what the sequestration could mean for these contracts? 

Mr. FLEMMING. Yes. And what we do is prepare scenarios based 

on, you know, what could potentially happen. And severe cuts to 

some of the programs may require us to reduce some of the staff 

associated with those particular contracts. 

Because our contracts are very, very small, we prefer to be able 

to—if one isn’t funded, to move employees from one contract to another contract. Because, in our case, our contracts sometimes are 

$1,000, and, you know, our average contract size is less than 

$100,000. So we can be a little bit flexible that way. 

Ms. VELA ́ ZQUEZ. Thank you. 

Thank you, Mr. Chairman. 

Chairman GRAVES. Mr. Hanna. 

Mr. HANNA. Thank you, Mr. Chairman. 

Mr. Minogue, you said that companies shouldn’t have to—and 

this is not a value judgment, just a question—you said that companies shouldn’t have to pay taxes until they are profitable. Can you 

give me a circumstance where they would have to pay taxes if they 

weren’t profitable? I mean, isn’t—— 

Mr. MINOGUE. I can’t think of any. 

Mr. HANNA. That is why I was curious when you said that. It 

struck me as odd. My understanding of the Tax Code is that when 

you make a profit you pay a tax, and not until. 

Mr. Flemming, in terms of an issue like repatriation, you represent—both of you represent multinationals, especially you, Mr. 

Minogue. Do you hear any talk about the tax rates that we have 

for repatriation in terms of multinationals and how it affects the 

businesses that you represent? 

Mr. MINOGUE. We are still a small company relative to managing 

our cash in and out of the country, and just achieving profitability. 

So, in the last couple years we have really focused on our U.S. operations, our U.S. market, and our U.S. clinical studies to remain 

frugal. As part of that, we also increased our manufacturing at our 


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U.S. facility in Massachusetts as well as some of our facilities in 

Germany. 

But the majority of our revenue and our operations carry the 

U.S.—— 

Mr. HANNA. So that is really not an issue for you. 

Mr. MINOGUE. It is not. But, obviously, in the medical device 

field, it does impact, because there are countries, like Ireland, 

where they have a lower tax rate. And even though we are a small 

company becoming a teenager in the big market of J&J and 

Medtronic, we are getting calls, we are having different types of 

government agencies around the world contact us directly, offering 

us perks and credits and funds if we would come to their country 

to manufacture. We have declined, but certainly there is a lot of 

interest to bring American companies, especially in med-tech, to 

bring them and lure them overseas. 

Mr. HANNA. Anecdotally, I have just heard so many stories from 

corporations with large amounts of cash that simply don’t want to 

bring to it this country to buy a company here or invest here because we have expectations that we tax it at the regular rates 

when they do that, which means they pay twice. 

Mr. MINOGUE. Correct. 

Mr. HANNA. Could I ask you about—anyone about, do you have 

difficulty—I mean, you are in, some of you, highly technical fields. 

A great deal of education required to work for you. Do you have 

trouble finding people who are qualified at the level you need them 

to be? And is STEM an issue for anyone? 

Mr. FLEMMING. In our case, because we do work for the U.S. Department of Defense, we hire people who are capable of obtaining 

a United States security clearance. So we hire U.S. engineers to do 

our software and our design. 

Interestingly enough, even in the level of unemployment, it takes 

us quite some time to find an engineer. Our office sits adjacent to 

the University of Central Florida, and we intern. But sometimes 

we can post a position and it may take us 6 months to find a qualified engineer to be able to do the work. So my feeling is, in our 

country we need to produce more engineers. 

Mr. HANNA. Interesting. 

How do you feel about the future as you watch this Congress? 

And, Ms. Mitchell, I mean, you are in the ad business; you must 

have some quip available. What does all of this make you think, 

when you are trying out there to make a living and we sit here 

and—go ahead. 

Ms. MITCHELL. Well, I would say this, that most of us who are 

small-business owners are entrepreneurs because we love it. We 

have a great passion for building something from nothing, and it 

is exciting for us to be able to see value come about from the work 

of our hands and to bring teams together. 

There are some really great resources that are available to small 

businesses, both public and private. The SBA does a great job of 

providing resources to small businesses. And in the private sector, 

there are a number of networks and organizations that have done 

a lot to accelerate growth in new business. And, for instance, in our 

industry, we are very active in the Public Relations Society of 

America; the Council of PR Firms; of course, today I am repVerDate Mar 15 2010 02:33 Dec 01, 2012 Jkt 076487 PO 00000 Frm 00019 Fmt 6633 Sfmt 6602 E:\HR\OC\A487.XXX A487

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resenting Women Impacting Public Policy; and the Women Presidents’ Organizations. These are examples of organizations that are 

doing a lot to help small businesses grow. 

And so I think it is a great opportunity for lawmakers to see that 

working together produces great results. And when you look at entrepreneurs, you don’t have to look very far to see the passion, the 

drive, and the pure grit it takes to make it. And I would hope that 

Washington would be inspired by a lot of the stories that are out 

there today by small-business owners who are doing all that they 

can to drive this economy forward. 

Mr. HANNA. Well, thank you very much. 

My time has expired, Mr. Chairman. 

Chairman GRAVES. Mr. Keating. 

Mr. KEATING. Thank you, Mr. Chairman. 

You mentioned uncertainty, a lot of you did, and it is clearly 

there. There is a whole set of tax exemptions and extensions set 

to expire at the end of the calendar year. Can you just comment 

on them? And I would ask you to just be specific about which ones 

you think are the most important and how they will affect future 

decisions for you. 

Anyone? 

Mr. MINOGUE. So, I will start, Congressman Keating. 

The medical device tax is going to start on January 1st. The details of it through the IRS have not been clarified. Our fiscal year 

ends at the end of March, so we have to close the books, report our 

numbers, be audited through our agency and to file our final financials. 

Therefore, we have a logistics concern of, what this tax is going 

to look like? How are we going to account for it? It will be the first 

million dollars out of our profits for that quarter. And then, of 

course, we are going to spend a lot of time and energy trying to 

figure out how do we close the books and be accurate and be in 

compliance. 

Mr. KEATING. I share that concern, as well, and I have supported 

making that change. We have 45,000 direct service jobs in Massachusetts that, you know, clearly fall into your particular industry. 

Just another quick question, if people weren’t going to do that. 

You know, one of my Subcommittees is Cybersecurity. I am just curious, particularly with a couple of your companies, what needs you 

see there, what some of the challenges are, what some of the landscape might be, you know, because of piracy and other threats that 

might exist. 

Mr. Flemming. 

Mr. FLEMMING. Well, the level of cybersecurity-related attacks is 

increasing, as you know, with a great frequency. Anything that we 

can do to improve our posture, because, you know, right now, you 

know, we are constantly on alert, especially with our software-asa-service business, which is more a private-sector business where 

we serve large Fortune 500 companies and the like. 

So, you know, I am not sure that I can, off the top of my head, 

come up with a solution that the government can give us for that. 

I think a lot of it is we need to exercise substantially more vigilance across the board, especially as it relates to our critical infrastructure. 


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I mean, I think there is a lot to be said, especially, for embedded 

devices that control critical systems being manufactured in the 

United States. As we have more control over the components that 

go in there and potentially the overall security, the less opportunity 

to potentially have backdoors and those kinds of things installed in 

them. 

Mr. KEATING. Does anyone else want to comment on that? 

Mr. MINOGUE. One is, obviously we are careful about what we 

put up and what we post. 

Another concern is just that the Freedom of Information Act, if 

it is not implemented correctly, could allow for the openness and 

exchange of confidential information to government agencies, such 

as the FDA. 

So we have policies in place, and we will continue to monitor that 

to make sure that we keep proprietary information confidential. 

Mr. KEATING. Great. Well, I want to thank all of you. 

And, Mr. DiMarino, I want to compliment you on not having any 

layoffs. And, certainly, I think, going forward, you know, your probably most valuable resources and assets are your employees. Can 

you tell us what that effect of your not having layoffs and trying 

to work with them has had going forward? 

Mr. DIMARINO. Well, I mean, it has brought my tremendously 

loyalty with my people. They are not even a thought—when things 

are tough, I don’t think about them. I have run a nightshift for 15 

years now, and I have other friends in the business that run a 

nightshift; they are worried about it. And I don’t think I have gotten six phone calls in 15 years from my guys. 

Mr. KEATING. Right. 

Mr. DIMARINO. It is just, you know, they do their work. Everybody is there to work. They all pull together. 

I have one gentleman, it is the only job he has ever had is with 

me. And his daughter just graduated high school and got a 4-year 

ride to Williams, which is pretty good. And that puts it all together 

for me. 

Mr. KEATING. Great. 

I would note, too, that in all of your opening statements that was 

a common thread, the team you put together and the loyalty that 

you have as a group. And I think that is why you are sitting there. 

So I want to thank you all for that effort. 

I yield back. 

Chairman GRAVES. Mr. Schilling. 

Mr. SCHILLING. Thank you, Chairman. 

Thank you all for coming. I apologize for being late. I had three 

meetings at the same time. 

Just a little background. I am a small-business owner myself. My 

dad and I, 16 years ago, we took a building that was pretty much 

vacant and we literally with our own hands built it from the 

ground up. And it has been pretty successful for us. It has been a 

lot of hard work, 60 to 80 hours per week. Now my children are 

running it for me, and thank goodness it is still up and going. 

But you folks have been somewhat successful in keeping people 

on the payroll. Can you just kind of walk me through—and maybe 

you have already discussed this—your decision to expand your 

businesses in the economic climate that we are in today? 


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Ms. MITCHELL. I would be happy to speak to that. 

We are also in a situation where talent is our very best asset. 

And the war for talent is real. We want to be able to attract the 

very best people that we can, and so it is important for us to be 

able to find good opportunities. 

And that was one of the things that we learned during the tough 

times that we faced, is that you have to stay very nimble as a 

small business. And, again, that is why I said we do it really well, 

but you have to be able to evaluate opportunity and know how to 

do it. 

For example, there are a lot of things in our field that we can 

move into, and we have, such as digital and social media, video 

services and creative-type services, training. These are things that 

we have added on to our core business model in order to be able 

to expand our growth. 

But not everything is the best opportunity. So you have to become very good at looking and knowing, what do I do well? Where 

can I win? That is where I am going to lean into opportunity. That 

is another motorcycling analogy, which is, you really want to be 

very careful about where you risk because you don’t have a lot of 

opportunity to fail when you are a small business. 

So I think that is something that we actually are all very good 

at, is knowing how to understand what those opportunities are and 

then having the courage to invest in that opportunity and really 

make it pay off for your company. 

Mr. SCHILLING. Very good. 

You know, the common thread that I do like—and I fully understand what you are talking about—is the teamwork. And then if 

you get one person out of sync, it is a problem, and that doesn’t 

work too well on a Friday night at a pizzeria. 

Mr. Minogue, you mentioned the medical device tax and the impact it would have on your business. I have in our district Cook 

Medical Supply in Canton, Illinois. And their mayor is very concerned with the medical device tax that is up and coming, if it is 

not repealed, how it is going to adversely affect the new business 

that they just built. And the sad part to this is, I visited with some 

of the leadership folks in the company, and Mr. Cook, before he 

died, his idea was to build one of these medical device buildings all 

over the United States of America. And since this medical device 

tax has been put into play, they are looking at halting that. Each 

one of these facilities is roughly anywhere from $10 million to $20 

million of new building, plus the jobs that it brings along with that. 

Can you tell me a little bit more about how this will affect your 

company, if you could, sir? 

Mr. MINOGUE. Sure. So the medical device tax is about $30 billion for the industry over 10 years. That is about a third of all research spent by the entire industry, so it is very significant. It is 

estimated it is going to cost us around 50,000 jobs in the industry 

based purely on the tax, if you look at the numbers. Specific to our 

company, it is a prettying significant hit. It is, again, about 15 percent of our research, 10 percent of our employees. It is more than— 

it is almost double our healthcare costs, and it goes up every year. 

To prepare for this impact, we are not investing in our legacy 

products, and not expanding outside of the U.S. as quickly as we 


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might. We might delay a newer product or delay a submission of 

a study a little longer. We will continue to grow, but we are going 

to be very frugal in how we do it. And we are going to invest like 

crazy in the products that have the biggest impact to patients, that 

also show the clinical value and, in today’s world, an economic benefit. 

Mr. SCHILLING. Very good. 

With that, I yield back. 

Chairman GRAVES. Just out of curiosity—and this question is for 

each of you—are you optimistic about the U.S. economy? And what 

are you worried about it, if you are concerned? 

Mr. Flemming. 

Mr. FLEMMING. As an entrepreneur, I am an optimist, but I am 

very cautious going forward as to the economy. I think that, you 

know, we are starting to see the—even though the recovery didn’t 

feel very good because it was very slow, we are at the other side 

of the business cycle. And so I think we have some tough years 

ahead of us. 

That being said, you know, there is a pony in there somewhere. 

I think there is some opportunity if you look for it. 

Mr. MINOGUE. I am optimistic in Abiomed because of our innovation and impact to patients, and I know we will continue to adapt 

and execute. 

As far as the economy, I am not pessimistic, I am not overly optimistic. I think that there are some decisions to be made, and the 

country has to continue to also adapt and execute. 

Chairman GRAVES. Ms. Mitchell. 

Ms. MITCHELL. I am an optimist, too. I wouldn’t be in the business I am in as an entrepreneur if I didn’t believe that there was 

always opportunity. I do think the American Dream is alive and 

well, and I love to see people take a chance. And I think what is 

before us now is an opportunity to inspire the next generation that 

comes behind us. We need to do a good job of demonstrating that 

there is a reason for them to take a risk and that that risk is rewarded. 

And I would encourage Washington to do all that it can to create 

an environment that is conducive for small businesses to be willing 

to go out there and make investment. Because we know these are 

the jobs that are being created. Small businesses hire and provide 

jobs for more than half the private sector, and that is a really important thing for us to remember as we want to be able to see this 

economic engine continue to drive forward. 

So I am very optimistic, but I think it will take all of us having 

our wits about us to make the most of opportunities that we have. 

Mr. DIMARINO. I am optimistic also, but the uncertainty leads to 

anxiety. I have a great many opportunities because of the reduced 

manufacturing capacity of the last 4 years in the country, which on 

the outside looking in sounds great. The problem with that is, as 

time goes by, less people are in the industry; you lose the opportunity to grow new skilled talent. So, although I have good opportunities to produce, I can’t. So I am stuck. 

To hire people and organically grow them all the time, you can’t 

grow fast enough with that. It takes time, a lot of time, to groom 

somebody and teach them the skills they need in this business, 


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whereas years ago you had a lot of shops, a lot of manufacturing 

facilities, and people changed jobs, they relocated. So when you got 

somebody, they hit the ground running. To bring somebody in new 

and train them, I don’t gain an employee, I lose half of the good 

employee training the new one. So it stalls your growth. 

Chairman GRAVES. Mr. Mulvaney. 

Mr. MULVANEY. Very briefly, at the risk of asking a question that 

has already been asked, if you would wave a magic wand, all of 

you, to each of you, and we could do one thing in the next 6 months 

to allow this optimism to come to fruition and turn into success, 

one thing, what would it be? 

And that is the same question to each of you. 

Mr. FLEMMING. I would say come together and solve some of the 

problems that have resulted in the uncertainty, you know, sooner 

rather than later. 

Mr. MULVANEY. But give me—there is a lot of different uncertainty. I am looking for, if there is one thing that you could look 

back and say, ‘‘Look, at least Congress tried; they did this one 

thing, and it helped me in my business,’’ what would that one thing 

be? 

Mr. FLEMMING. Well, they are related, you know: simplify the 

Tax Code and resolve the sequestration issue. 

Mr. MINOGUE. I would say eliminate the medical device tax. 

Ms. MITCHELL. Certainty in the Tax Code, because when we have 

certainty, we can plan much more effectively. 

Mr. DIMARINO. Resolve the Tax Code, same. 

Mr. MULVANEY. Mr. Chairman, I apologize for my late arrival. I 

don’t want to ask questions that have already been answered, so 

I will yield back the balance of my time. 

Chairman GRAVES. Well, I want to thank each of you for coming. 

Obviously, you are all optimists or you wouldn’t be entrepreneurs, 

but we very much appreciate your testimony. We can learn something from every one of you. This has been a great hearing. And 

there are companies out there that are figuring out how to overcome a lot of adversity and make it work, and I applaud all of you 

for that. 

So, with that, I would ask unanimous consent that Members 

have 5 legislative days to submit statements and supporting materials for the record. 

Without objection, that is so ordered. 

This hearing is now adjourned. 

[Whereupon, at 4:06 p.m., the Committee was adjourned.] 


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"Tales of Resilience: How Small Business Prospered 

Despite the Recession" 

Testimony of: 

H. Todd Flemming 

President and CEO 

Infrasafe, Inc. 

Orlando, Florida 

Before the 

Committee on Small Business 

United States House of Representatives 

July 25, 2012 

The Honorable Sam Graves, Chairman 

The Honorable Nydia M. Velazquez, Ranking Member 
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Good afternoon Chairman Graves, Ranking Member Velazquez and 

members of the Committee. Thank you for hosting this important 

hearing today and for your invitation to provide testimony. My name 

is Todd Flemming, President & CEO of Infrasafe Inc., headquartered 

in Orlando, Florida. Infrasafe is a global security technology 

integrator focused on serving organizations with the most stringent 

security requirements. Our mission is to provide our clients with 

unique, flexible and long-term solutions to effectively manage both 

physical and information security. Veristream and Advantor Systems 

Corporation are wholly owned subsidiaries of Infrasafe. Advantor 

provides a wide spectrum of security technology and services to 

government clients. Veristream is a software-as-a-service provider 

committed to protecting organizations from security risks, focusing on 

visitor and vendor management, information security, secure 

credential management and authentication. Infrasafe was founded in 

2002. 

"In the middle of every difficulty lies opportunity. " - Albert Einstein 

Fortunately, Infrasafe has experienced solid growth over the past five 

years. In 2007, we employed 57 people. As of this month, Infrasafe 

has a workforce totaling 177. We expect to employ over 200 people 

by the end of August. Unfortunately, this type of growth has not been 

typical for most of my peers. The Great Recession followed by a 

weak economic recovery (and ongoing uncertainties) has made the 

business environment a very challenging one to navigate. I happen 

to be in an industry where demand continues to grow. However, it is a 

very competitive industry for small players like Infrasafe. We operate 

in both the government and private commercial sectors, which also 

offers its own set of unique challenges. 

Infrasafe has grown by staying focused, adopting technologies to 

help us be more efficient, and carefully paying attention to the 

fundamentals driving our bottom line. 

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Staying Focused: Small businesses like Infrasafe have limited 

resources so we need to deliver value to limited customers. The 

company has found its niche, and has successfully delivered on its 

promise. We have accomplished this by delivering on our promise to 

provide powerful and effective technology, backed by 

uncompromising service and support. 

Staying Flexible: Being small certainly has it challenges, but it 

also provides us the opportunity to remain flexible. But flexibility is a 

mindset, and our management team remains open to better ways of 

dOing business. For example, Infrasafe offers workplace flexibility for 

our employees in order to attract and retain a skilled workforce. We 

are always searching for new strategies to operate more efficiently 

(see technology below), and remain open minded about doing 

business in new markets. 

Global Presence: Our client base spans four continents, 

reflecting our unique ability to meet the diverse and challenging 

needs of business, government, and international markets on a global 

scale. 

Financially Focused. Infrasafe focuses like a laser on "CPR"--

Cash, Profit and Revenue Growth. We maintain a conservative 

balance sheet given economic uncertainties. As mentioned above, 

we strive to be more efficient. Domestic "outsourcing" (our product 

manufacturing is done by a third party in Coco Beach, Florida) is one 

way we are able to improve upon efficiency and focus on revenue 

growth. 

Technology is Embraced: Infrasafe has readily embedded 

technology solutions across our operations, allowing us to cut costs 

and operate more efficiently. For example, we use mobile 

applications and technology solutions in many areas of the business, 

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including GPS to locate and route service trucks to ensure quick 

service for clients and efficient use of the company's resources. Our 

service teams record services performed, and report inventory used 

on mobile devices. Our sales team, managers and staff use 

GoodReader, Dropbox and Salesforce.com for their multifaceted 

needs (viewing, editing and storing non classified documents and 

data, reviewing and updating customer information). These are just a 

few examples of the many ways Infrasafe has enthusiastically infused 

technological innovation across our business operations. 

Human Capital: Infrasafe employees are the foundation of our 

success, and we continuously strive to build an environment that 

fosters creativity and support. Infrasafe works to instill a culture of 

excellence, and that manifests itself in the emphasis we place on 

training and open communication. As noted above, we provide our 

employees with cutting- edge technological tools to efficiently do their 

jobs. Our employees enjoy working at Infrasafe -- they are both 

challenged and rewarded by their work experience. As President, I 

believe it is critical to surround myself with the best and brightest. In 

addition to an outstanding workforce and management team, 

Infrasafe has a board of directors, which I regularly convene to 

explore better ways of doing business, new revenue opportunities 

and strategic advice. 

A lot of hard work and sleepless nights have gone into making 

Infrasafe a success. Obviously, Infrasafe is faced with day-to-day 

challenges like any other company. The economic environment 

keeps us highly focused and generally conservative when it comes to 

risks and new investments. 

The potential headwinds we see this year and beyond are the key 

issues that this Committee has explored. For example, the uncertain 

tax environment for S Corps and LLCs; the direction of the economy 

and ongoing uncertainties related to costs and how this will impact 

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commercial expansion; as well as an uncertain Department of 

Defense environment under the looming shadow of sequestration. 

I thank you for the opportunity to provide testimony today. I look 

forward to your questions to discuss Infrasafe's strategies and 

practices that have allowed us to grow during this difficult economic 

period. 

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House Small Business Committee 

"Tales of Resilience: Small Business Survival in the Recession" 

July 25, 2012 

Testimony of Michael R. Minogue 

CEO, President, and Chairman of the Board of Abiomed 

On behalfofthe Advanced Medical Technology Association 
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Chairman Graves, Ranking Member Velazquez, and members of the Committee, thank 

you for holding this important hearing today to highlight the success of small businesses 

across the country. My name is Mike Minogue and I am the Chairman, President and 

CEO of Abiomed, a small medical device company located in Danvers, Massachusetts. 

We make the world's smallest heart pumps that can be inserted percutaneously through a 

small hole in the leg. Additionally, I serve as chairman of the board of AdvaMed's 

Emerging Growth Company Council, the division of AdvaMed which focuses on 

emerging medical device companies. 

About the Medical Technology Industry 

Abiomed is a member of AdvaMed, the Advanced Medical Technology Association, 

which represents approximately 500 of the world's leading medical technology 

innovators and manufacturers of medical devices, diagnostic products and medical 

information systems. Over 70% of AdvaMed member companies are relatively small 

companies with sales ofless than $100 million per year-the majority ofthcse companies 

not yet profitable. The strength and future of the industry lies with these companies, who 

are devoted to the development of new technologies that allow patients to lead longer, 

healthier, and more productive lives. 

The medical technology industry is an American success story. The industry directly 

employs more than 400,000 workers nationwide. Typically, for every worker our industry 

directly employs, another fbur workers are employed by businesses supplying 

components and services to our industry and our employees, so that the total numbers 

generated by our industry exceeds two million. 

The jobs our industry provides are good jobs and serve a function that helps patients all 

over the world. Industry pay levels are 38 percent higher than average pay for all U.S. 

employment and 22 percent higher than other manufacturing employment. While the 

number of manufacturing jobs was plummeting across the larger economy, even before 

the recent economic downturn, employment in our industry was expanding. Between 

2005 and 2007, medical technology employment grew 20.4%, adding 73,000 jobs. 

During the recession, between 2007 and 2008, MedTech employment dropped 1.1 

percent, compared to 4.4% for manufacturing as a whole. 

What the Committee may not know is that the medical technology industry is heavily 

skewed toward small companies-the kind of companies that begin with a scientist or 

doctor with an idea to improve patient care. Almost two-thirds of the 7,000 medical 

technology firms in the U.S. have fewcr than 20 employees. A high proportion of the 

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breakthrough products in our industry come from these small, often venture-capital 

funded companies. 

And whether the firm is large or small, success in our industry comes only from 

innovation-the creation of diagnostics, treatments and cures that save and enhance lives. 

While we are very proud of our contributions to the U.S. economy, we are even more 

proud of our contributions to improving patient care. For patients, medical progress has 

been remarkable. Based on the latest available data, between 1980 and 2000, medical 

progress added more than three years to life expectancy. The death rate from heart 

disease was cut in half; the death rate from stroke was cut by one-third, and the death rate 

from breast cancer was cut 20%. 

About Abiomed 

As the Chairman, President and CEO of Abiomcd for the last 9 years, I am acutely 

familiar with the challenges faced by small businesses every day. We have increased our 

patients supported by a factor of 10, grown revenue by a factor of 7, raised over $100 

million in cash, and we became profitable last year while incurring no debt. 

Abiomed was founded in 1981 in Danvers, Massachusetts, and we've had the fortune of 

continuing to grow since our founding. We are now a world leader in percutaneous 

mechanical circulatory support and we offer a continuum of care for heart failure 

patients. Specifically, our products provide prophylactic to emergency circulatory support 

for the heart. We believe the optimal clinical outcome for patients is one that restores 

their quality of life and is the most cost-effective solution for the healthcare system. We 

continue to publish papers and create new products around this goal. Many of our 

products are being utilized outside the United States and do not yet have FDA clearances 

or approvals. 

While we have grown, we have incurred net losses since our inception with the exception 

of this fiscal year. Even though we were profitable for the first time in fiscal 2012, we 

may incur challenges in the future as we continue to invest in research and development 

related to our products, conduct clinical studies and registries, expand our commercial 

infrastructure and look to expand to new markets. 

When Abiomed was founded, we were a company of 1 0 people with no products on the 

market. Through years of perseverance and hard work, we have now grown to a company 

of 440 employees and total revenue last year of$126 million with projections of$156 

million this year. Even despite our country's recent economic hard times, we have 

continued to grow and add manufacturing jobs. At the start of the recession, in fiscal 

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2008, Abiomed's total revenues were $59 million and we had approximately 300 

employees. 

While I'm proud that my company is a success story and that we have continued to 

develop and manufacture lifesaving products for patients, not every small company in our 

industry is as fortunate and many have gone out of business. The current environment is 

the most critically challenging of my healthcare career. Even with truly innovative 

products and serious commitment, many emerging growth medical device companies 

simply do not succeed-especially in the current down economy when investment dollars 

are scarce and regulatory challenges are growing. 

For Abiomed, our success is founded on three pillars: innovation addressing a clinical 

need, scientific evidence, and hard work with execution. 

In order to succeed in the medical device industry, which is both highly regulated and 

highly competitive, the first critical element of success is innovation. Abiomed created 

the world's smallest heart pump, lmpella, which is IIl00th the size of the heart and can 

pump half to all of its output. Every day, we continue to develop on our breakthrough 

technologies-making improvements to them as scientific knowledge of the heart 

increases and as medical treatment progresses. The medical device market is 

characterized by a rapid innovation cycle, and to be successful companies must push to 

be on the leading edge of new technologies. 

Secondly, in this day of increasing health care costs, scientific evidence around the 

clinical and economic benefit is critically important. Whenever we develop a new, 

innovative product, we need to be able to demonstrate that the product provides value to 

the health care system. These FDA studies and ongoing registries require significant 

investment and have ongoing maintenance for post-market monitoring, peer reviewed 

publications and independent cost effectiveness analyses. In summary, we have amassed 

a compelling collection of clinical and economic data around the use of our products and 

recently been incorporated into the medical guidelines as determined by the physician 

societies. 

The third pillar-hard work and execution-is fundamental in any industry. A successful 

company needs to focus on quality, and in Abiomcd's case, quality in manufacturing to 

patient support. 

Aside from these three pillars, Abiomed has employed other strategies to succeed during 

these tough economic times. We are frugal. We cut expenses where we can and spend 

slowly. Sometimes that means that we invest or spend at a slower pace than we could, 

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given more positive economic circumstances. But this slow, steady, and frugal approach 

has allowed us to grow, despite the current economy. 

Upcoming Challenges 

1 remain optimistic that Abiomcd will continue to succeed based on the strength of our 

innovations and impact to patients. However, we do face challenges on the regulatory 

fi·ont. For example, we have several new products outside the U.S. that will require FDA 

interaction in both review and design of future studies in order to bring these products to 

the United States. Abiomed believes in patient access to safe and effective medical 

devices and supports the FDA as a critical partner in our efforts to bring products to the 

market. Without a strong, effective, and efficient FDA, we cannot have a strong and 

competitive industry. Speeifically in the future, the predictability, consistency and 

efficiency of FDA decision-making, as well as risk-based standards of evidence to assure 

the safety and effectiveness of medical technology products, is essential to drive new 

innovations for patients. We are hopeful that the recently enacted Medical Device User 

Fee agreement will help to improve the process for all involved parties. While we have 

not always been pleascd with the pace of progress, I would note that the FDA leadership 

is supportive of initiatives to help smaller companies and is passionate about their 

mission. 

In the reimbursement environment, the Center for Medicare and Medicaid Services 

(CMS) has a diligent and thoughtful process to analyze clinical data fi'om the real world 

usage within registries, peer reviewed publications and the FDA approved studies. We 

will continue to support more publications with the clinical experts in the field, while 

incorporating the cost effectiveness models. 

My biggest concern relates to the medical device tax. Starting on January I, 20l3, 

medical device companies will face a $30 billion tax, which was included as part of 

health care reform. While I am supportive of improving our country's health care system 

and improving patient outcomes, this tax is misguided and should be repealed. 

Studies have estimated that up to 43,000 U.S. jobs will be at risk after the tax goes into 

effect. The tax will be especially damaging to innovative start-up companies, since startups tend to suffer losses in their early years when they are pouring money into research 

and development, and trying to move a product to market. Since the majority ofthe 

industry includes smaller companies that are not yet profitable, this tax increases the time 

these companies will be operating at a loss. For some, it could truly be the difference 

between surviving and having to close their doors. 

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For Abiomed, the impact of the medical device tax will be strongly felt. We're estimating 

that the tax will cost our company about $4 million per year. To put this figure into 

context, we would not have achieved profitability last year. This tax is greater than the 

cost of providing healthcare coverage for our employees. And it's about 15 percent of our 

research investments and 10 percent of the expense of our employees. Since we have just 

achieved profitability, we will have to hire at a slower pace and defer future research 

projects to offset the new tax. Abiomed supports healthcare reiorm around patient 

quality; however, we believe this medical device tax is a separate policy issue and will 

have negative consequences on innovation. 

I am heartened that the U.S. House of Representatives voted in early June, with bipartisan 

support, to repeal the device tax. I am hopeful that your Senate colleagues will follow 

your lead. The tax will cost jobs, harm innovation, and could lead to higher costs for 

patients, which is something that no one wants. 

Conclusion 

Mr. Chairman, Ranking Member Velazquez, and members of the Committee, thank you 

for the opportunity to testifY today, and thank you for your focus on companies who have 

been successful, despite the economic downturn. Small businesses are truly the backbone 

of America's economy-just as they are the backbone of the medical device industry. 

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~* WIPP 

Women Impacting Public Polky 

STATEMENT OF ELISE MITCHELL, President and CEO of 

Mitchell Communications Group, Fayetteville, AR 

On Behalf of Women Impacting Public Policy 

Before the U.S. House of Representatives 

Committee on Small Business 

Tales of Resilience: Small Business Survival in the 

Recession 

July 25, 2012 
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My name is Elise Mitchell and I am the President and CEO of Mitchell 

Communications Group. I bring you greetings from my company and from our 

home base of Northwest Arkansas, a thriving region with deep entrepreneurial 

roots in one of the most beautiful parts of the country- as Chairman Graves well 

knows. 

I am also here today on behalf of Women Impacting Public Policy (WIPP), a 

national nonpartisan organization advocating on behalf of nearly 1 million 

women-owned businesses and representing 64 business organizations. I'm 

proud to represent all of these leaders. 

Established in 1995 as a sole proprietorship, our company today is a Top 50 

strategic communications firm working with some of the world's largest 

companies and best known brands including: Walmart, Hilton Hotels & Resorts, 

Tyson Foods, Procter & Gamble, Sam's Club, Southwestern Energy Company, 

and J.B. Hunt Transport. 

We are fortunate to do national and global work for these distinctive clients. We 

have successfully attracted top talent and developed new and innovative 

communications services. As a result, we've grown 445% in the past four years 

alone. We are also very honored to have won numerous industry awards, and 

twice been named to the Inc. 500/5000 list, as well as one of the "50 Fastest 

Growing Women-Owned/Led Companies in North America" by Women 

Presidents' Organization and American Express OPEN. 

I wish I could say that many women business owners shared my experience, but 

many small-business owners have faced significant challenges in this recession. 

Not only do we face many hurdles but our customers are also drowning in this 

economy, making business harder to find. I am often asked how we have 

achieved growth in spite of a still uncertain economy. 

The answer is not what you might expect. I'm an avid motorcycle rider, and I've 

built my business based on a concept called "Looking Through the Turn," a 

fundamental principle of motorcycling that offers great inSight. As you approach a 

turn, you must look where you want to go rather than fixating on potential 

hazards in the turn itself. The challenge comes in keeping your eyes focused on 

where you want to end up while using your instincts and experience to adjust 

within the turn - all at a moment's notice. 

Inspired by this philosophy, I've used these core principles to help our agency 

succeed, and there are several important lessons I have learned along the way. 

First, don't be afraid to admit you don't know, but be willing to do whatever it 

takes to find out. Throughout the past four years, we've all faced challenges we 

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could never have imagined. I've learned to recognize when I need a new 

solution, and am willing to do whatever it takes to figure it out. That means 

surrounding myself with the smartest people I know and remaining a life-long 

learner so I can constantly improve my game. 

Second, leaders who look through the turn stand for something. During some of 

the darkest days of the recession, we came together as a company to write a 

common set of values: trust, open communication, service, results and 

commitment. These values guided us when we needed them most, and have 

helped us attract some of the best employees and clients anyone could hope for. 

Third, leaders who look through the turn know how to take risks. I suppose risk is 

something I am more comfortable with than most, but the trick is to balance risk 

and discipline to yield solid results. In spite of the ambiguity of the marketplace, 

I've encouraged our team to look for emerging opportunity. As a result, we've 

developed several new services, enhanced our value proposition, and helped our 

business grow. 

Finally, leaders who look through the turn don't try to go it alone. It is the greatest 

privilege of my career to be the steward of Mitchell Communications Group, and 

I've learned that "excellence attracts excellence." Great people attract great 

clients -- you can't have one without the other. There are also a number of 

organizations such as WIPP, the Women Presidents' Organization and Amex 

OPEN that provide guidance via a network of support and advocacy for women 

entrepreneurs- nobody has to go it alone. 

It takes courage to be an entrepreneur, and there is much Washington can do to 

make the roadway smoother rather than more hazardous. It has been made clear 

that Washington recognizes the vital role of small firms in the economy and the 

plight of America's job creators. But what we need to see from our lawmakers is 

an effort to fully consider small businesses during rule-making, facilitate access 

to capital and provide certainty about taxes- this will allow us to do what we do 

best- fuel the national economy and hire more of our neighbors. 

Women owned businesses represent one of the fastest growing contributors to 

our national economy, with an impact of $1.2 trillion annually. Yet we are also 

faced with a number of unique obstacles. It is because of those obstacles placed 

before us, and only us, that I ask you to support those resources we have to not 

only level the laying field but help us continue to grow and prosper while growing 

the economy with us. Programs like Women Business Centers and the WomenOwned Small Business (WOSB) contracting program are a step in the right 

direction and will yield immense results. 

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I started my business as an S-corp, which is a business that files the company 

taxes under the owner's personal tax return. It seems that the dialogue in D.C. 

about taxing "the rich" has completely ignored the tax structure of most of 

America's small companies. While they may file with more than $250,000 when 

tax season comes, almost every penny of that is reinvested in the firm- whether it 

be to make payroll, purchase new equipment or simply keep the lights on. Now is 

not the time to increase taxes on those creating the jobs that Americans so 

desperately need. More importantly now is not the time to hold small businesses 

hostage in a state of tax uncertainty, we must be able to plan ahead if we are to 

move forward. 

We must also facilitate greater access to capital and support the resources we 

need to not just survive, but thrive. Even with the track record of funding 

America's cash starved entrepreneurs, credit unions are being held back by an 

outdated and nonsensical rule. There is currently a cap on loans to small firms 

that, if increased, would inject an extra $13 billion into the economy, giving small 

businesses the fuel they need to create 140,000 new jobs in the first year alone. 

The Small Business Lending Enhancement Act (H.R. 14181 S. 2231) would do 

just that by increasing the credit union lending cap to 25.7 percent. 

Support women entrepreneurs and the economy will prosper. 

There are countless women-owned businesses, 7.8 million be exact, working 

tirelessly to drive our economy forward. And when I think about them, their 

dreams and determination inspire me, as I know they do you. 

I ask all of you here today as well as your colleagues in Congress to help lay the 

tracks for America's job engine to move forward, and to help ease many of the 

crushing pressures the economy places on us. Improve the economy and the 

nation's job engine will have more fuel to propel us to a recovery, as small 

businesses have done in every recession in modern history. 

Now more than ever before, our country needs businesses and lawmakers who 

are willing to look through the turn, to fix their eyes on where we want this great 

country to end up, and work together to get there. 

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Mike DiMarino is linda Tool. He has spent his entire professional life with the company, which 

was established in 1952 by Rudy Cataffo. Mike has been the CEO since 1988, overseeing the 

expansion of the company from a 3 man conventional machine shop to a state ofthe art 

contract manufacturing company offering custom precision components and assemblies to 

leading OEMs in aerospace, aircraft, hydraulics, automation, electronics, defense, machine 

builders, medical devices, packaging, robotics and telecommunications. 

Mike DiMarino participated in the Goldman Sachs 10,000 Small Businesses Program and the 

UBS Mentorship Program. 

INTRO: 

Thank you for inviting me this event to share with you some of the things I and my team of 

talented, dedicated employees at Linda Tool did to come through this challenging financial 

climate with greater capabilities and secured business through 2017. 

STORY: 

The last four years have meant sacrifice for all of us. Personally, I have been set back 10 years 

financially. But I was willing to alter my lifestyle in order to keep my people. I learned a long 

time ago that state-of-the-art manufacturing equipment is expensive, but the people who 

operate it are priceless. 

I hand-pick my team ... no skaters ... we all feel the same way. Everyone pulls together with a 

singular objective to do the best job possible. I work hard. They work hard. And I pull for the 

people who pull for me. I always try to keep the lines of communication open and let the 

employees know the truth about what's going on. Although times were lean and I couldn't 

give raises, I did everything I could to keep my team together, without laying off a single 

person since 1983. It meant sacrifices like cutting back to 32 hours for a period oftime. But 

they didn't lose their benefits, like vacation pay, sick days, or healthcare. Still, the burden of 

the challenge couldn't be placed on their backs alone, so I looked for other ways I could 

support them by building the business in ways that would provide long term relief and 

security. 

So how did I do it? 

Mike DiMarino - How I Survived the Recession and Came Out On Top Page 1 
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I did the opposite of what you would expect. Instead of pulling back, I invested heavily in new 

equipment, technology, training and marketing. I uncovered markets that offered business 

growth potential but first I needed to get certain things so I could compete for those kinds of 

contracts. I took a big risk and tapped into my personal resources to fund the expansion of our 

manufacturing capabilities and our entrance into these new markets. 

From the outside looking in you would have thought there was no recession at Linda Tool. But 

there was and we had to work fast and be smart about every next move we took. The key to 

our survival was close management of every detail, no matter how small, including: the 

equipment we purchased; making sure to pay our vendors on time so they could stay in 

business; the cross-training of our personnel; strengthening our customer relations to our 

greatest ability; networking; and constant communications and evaluations along the way. 

I reached out to local resources for help too. f aligned with the Southwest Brooklyn Industrial 

Development Corporation - SBlDC - where I met Congresswoman Nydia Velazquez, one of 

Brooklyn's greatest advocates for small business. She helped us to acquire the Cost Share 

Grant that was instrumental in the installation of the linda Tool Green Roof for environmental 

sustainability, keeping our costs manageable for a project like this. The SBlDC is a great 

organization and it may be that everything I did leads back to them in some way. 

I also became deeply involved with the New York City Small Business Services and their 

training grant program. ! partnered with them to run the machinist training program at our 

facility in Red Hook, Brooklyn. Some of you may know how difficult it is to find skilled labor. By 

hosting the training program I was able to observe the students and'present them with an 

opportunity to apply for employment with us. We benefitted by being able to select from a 

pool of trained, qualified applicants. Right now, we are talking with the SBS about an 

Apprenticeship program. 

We also utilized the SBS's training grant program to achieve two industry certifications we 

needed to open up opportunities in market areas we hadn't been qualified for in the past. For 

example, now we can compete for certain government contracts. 

But training not only opened up new business opportunities for us, it also gave us a way of 

cutting costs by cross-training our people. So the guy who runs the lathe, for example, was 

trained to also run the mill. This way we were able to reduce labor costs by utilizing the talents 

of our existing people. 

Mike DiMarino - How 1 Survived the Recession and Came Out On Top PageZ 
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While we were busy with training and certifications, we had to start networking in order to 

make the right contacts. This led us to the Goldman Sachs 10,000 Small Businesses Program, a 

tremendous program that can really help enhance a small business and the way they think and 

operate. We also joined the NTMA - National Tooling & Machining Association - so we could 

be connected with new business opportunities and completed the UBS! Clinton Foundation 

Mentorship program. 

These resources are very valuable tools for a small business and something all small business 

should look at. Now our people are working a lot of overtime again - making up for the time 

they lost, and then some! So you see, it all balances itself in the end. We faced our challenges 

head-on, guided by inspiration and fueled by teamwork, giving what we could, and giving up 

what we had to. Because of that, we continue now on a path that has enabled us to access 

long term contracts that take us right through 2017 so far! 

Linda Tool is blessed with great personnel. Just as we offer the highest quality and care to our 

customers, we also offer the same to our dedicated employees. I believe we are able to 

achieve the things we set out to achieve because of the people who work for us and with us. It 

is through our support of them that they are able to produce what is needed. 

Thank you for inviting me to share the Linda Tool story. I wish you all the greatest success. 

### 

Mike DiMarino - How I Survived the Recession and Came Out On Top Page 3 
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BELiY..A: RUMFORD INDUSTRIAL GROUP 

Repair' Protect· Exclusive Authorized Distributor Improve 

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July 20,2012 

U.S. House of Representatives 

House Small Business Committee 

2361 Rayburn House Office Building (RHO B) 

Washington, D.C. 20515 

Dear Chairman Graves: 

Thank you for the opportunity to discuss our successes and our concerns during this 

challenging time. 

Rumford Industrial Group is a small industrial distribution ccmpany located in Dayton Ohio. 

Incorporated in 1980 by Jim Rumford we are your typical sales organization. The economic 

climate in 1980 wasn't very favorable for starting a company. Interest rates were around 18% 

and banks just weren't lending anyway. 

We've made investments over the years to stay ahead of the competition and as our company 

grows, we hire. Our group currently numbers 40 over a 5 state territory. 

As a sales organization it is our responsibility to provide certain functions to support our sales 

staff. These include but aren't limited to: 

Office/warehouse (of which we're about to break ground on a new 8500 sq ft facility). 

Accounting/Bookkeeping department 

Shipping/Receiving capabilities 

Customer Service 

Order Taking 

Marketing Department 

Technical Support 

Sales ConSUltants 

Application Company 

By having a fully functional office to support our sales field we are able to increase our presence 

in our industrial accounts by making our sales staff more efficient. This increases our sales and 

allows us to expand our internal and external organizations. 

In 2009 when the economy tanked we lost 40% of our business. We chose to use our savings 

accounts to keep people employed instead of laying them off. We believe most small 

businesses in this country would do the same if they had the option. We were fortunate when in 

August of 2010 business started picking up and we were able to gain back 25% of the previous 

year's losses. Still down but not as far. In 2011 we were up 25% over 2010 and so far for 2012 

we are running at a 35% increase in business. How are we managing this? Well, we went back 

to the basics. We started calling our customers, knocking on doors and sending email 

newsletters to let the customer base know about our capabilities. Basically we implemented a 

great marketing campaign. 

772 Congress Park Drive' Centerville, OH 45459 

Toll Free: 800.336.2827 

Tel: 937.435.4650 

www.rumfordgroup.com Fax: 937.435.3242 
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Typically in economic downturns our business does very well as we rebuild and salvage 

component equipment in the industrial sector. This last downturn didn't just close factories and 

facilities, they were torn down. Automotive plants that covered hundreds of acres of land are 

gone. The industries that support big business were just gone. We were fortunate to survive 

and one of the main reasons for this is that we carry no debt. By not having debt to service we 

can focus on our mission of effectively educating employees and customers on providing 

reliable lasting solutions for the repair and reclamation of buildings, structures, machinery and 

equipment. 

I'd like to make an important note. Our success and our survival as a small business is in no 

part due to the actions of the government. Indeed, the government could have eased lines of 

credit for small businesses and reduced the paperwork burden to obtain temporary financing, 

but it either did not happen or the bureaucracy was too burdensome. 

During the economic downturn between 2008 and 2011, we tried to expand our business into 

the military, specifically the Army. Our focus was to improve the preservation and maintenance 

of Army equipment and we had numerous meetings with Army officials. Unfortunately, the Army 

has little focus on reducing the life cycle cost of their equipment and focuses more on quick 

fixes, thus spending more on maintenance and equipment over time. Indeed, there are few in 

the government capable of making life cycle determinations during acquisition decisions. After 

three years of trying to have meaningful discussions and meetings to change the Army's 

maintenance focus, we returned to our basic commercial rools working with companies who are 

interested in saving money. We are disappointed by a general lack of business acumen in the 

government. 

The tax code needs to be completely abolished and rewritten to either a fair or flat tax where 

everyone pays their fair share, not just the wealthy. 

In discussions around our community here are some bullet points that other small business 

owners would like to see us share with you. 

1) Keystone Pipeline needs to be completed. 

2) Fracking needs to be allowed to move forward. 

3) SBA - Guarantees were put in place during the financial crisis and then removed. We'd 

like to see them reinstated. 

4) Obamacare is proving to be burdensome, expensive and doesn't solve the health care 

problems. 

5) Frustration with lack of federal budget and imbalance in receipts vs. expenditures. 

6) Extend Bush tax cuts for all. This gives us the ability to make plans. 

7) The unceasing attacks by the administration and certain members of Congress on the 

hard won success of numerous small business men and women who are the backbone 

of employment in our nation is despicable. To call successful small persons wealthy and 

to add additional tax burdens such as the Obama Health Plan will hurt employment and 

investments. 

8) We would like the paperwork associated with small business loans significantly reduced. 

Small businesses can grow and improve the nation's unemployment situation if we have the 

same access to capital at rates similar to large companies. There is a difference between low 

risk and no risk and too many financial institutions have taken the no risk approach. 
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Rumford Industrial Group is proud of its accomplishments. We have weathered poor economic 

conditions through hard work and sacrifice, reducing debt, and by making prudent financial 

decisions. It has not been easy and many of the govemment's policy decisions have not 

improved conditions. We look for actions the House Small Business Committee can take to 

reduce burdensome rules and regulations that will help small business gain faster access to 

credit, reduce bureaucratic oversight, and promote a tax structure that encourages small 

businesses to grow in both revenue and employment. Small business is the cornerstone of the 

great American success story where personal sacrifice can lead to a better life for all the 

citizens of America. 

~ Stephanie Rumford 
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701 Pennsylvania Avenue, Ste. 800 

Washington, DC 20004-2654 

Tel: 202 783 8700 

Fax: 2027838750 

www.AdvaMed.org 

July 27,2012 

Representative Richard Hanna 

319 Cannon House Office Building 

Washington, DC 20515 

Dear Representative Hanna, 

AdvaMed 

Advanced Medical Technology Associatiol 

Thank you for your questions and interest in the medical device industry at the Committee on 

Small Business Hearing: "Tales of Resilience: Small Business Survival in the Recession," During 

the hearing, we discussed the medical device industry and whether the medical device tax was 

on profits or revenues, I want to provide a little additional context and information on this topic 

and ask that this letter be added to the hearing record_ 

The medical technology sector is one of our nation's leading manufacturing industries, and has 

the potential to be a continuing vehicle for job creation_ The medical technology industry is 

heavily skewed toward small companies_ Almost two-thirds of the 7,000 medical technology firms 

in the U.S_ have fewer than 20 employees_ Set to take effect January 2013, the medical device 

tax could result in the loss of over 40,000 jobs as well as $3_5 billion in worker wages and 

benefits_ American device manufacturers have already been forced to cut jobs and halt expansion 

plans in anticipation of this new tax, 

The medical device tax is different than most taxes levied on businesses in that it is an excise tax 

and therefore applies to U.S, sales, not profits, of medical device manufacturers, All medical 

device companies, regardless of whether they are profitable or not, will be subject to the tax, The 

new tax on revenues will be especially damaging to small device companies like Abiomed, Small 

device manufacturing businesses tend to suffer losses in their early years when they are pouring 

money into research and development, and trying to move a product to market. 

On June 7, 2012, you along with the majority of your House colleagues voted to repeal the 

medical device tax, Repeal will allow America's medical device developers to invest in 

innovation, helping maintain America's global leadership in new medical technology, Advances in 

diagnostic and treatment tools improve the quality of our health care - helping us live longer, 

healthier lives and reduce the costly burden of chronic disease, 

I appreciate your interest in the industry as well as your support for the repeal of the medical 

device tax, I hope we can continue to work together to protect high-wage Americans jobs, 

maintain our global competitiveness, and encourage the research and development needed to 

find tomorrow's treatments and cures, 

S?~J I/..J-.-

Michael Minogue 

CEO, President and Chairman of the Board of AbioMed 

AdvaMed Board Member 

cc: Sam Graves, Chairman, Committee on Small Business 

Nydia Velazquez, Ranking Member, Committee on Small Business 

flringing innovation to patient care worldwide